Polish Mortgage for a Foreigner

paddy123:

I've just had a quote for a Polish mortgage with an interest rate of 7%. I've seen that the Polish Central Bank has set rates at 3.5%. 7% therefore seems pretty high to me.

From what what I've seen, mortgages for foreigners are hard to come by at the moment, but does any one have any idea what an average mortgage interest rate in Poland is at the moment?

paddy123	Jul 30, 09, 10:28 / #
I've just had a quote for a Polish mortgage with an interest rate of 7%. I've seen that the Polish Central Bank has set rates at 3.5%. 7% therefore seems pretty high to me. From what what I've seen, mortgages for foreigners are hard to come by at the moment, but does any one have any idea what an average mortgage interest rate in Poland is at the moment?

SeanBMThreads: 41 Posts: 8,727 Joined: Mar 10, 08	Jul 30, 09, 10:34 / #
Hello Paddy123, And welcome to the Polish forums. I am not a mortgage broker. paddy123: with an interest rate of 7%. In which currency?. It sounds like it is in Zloty, try getting one in Swis Frank for a comparison. Currencies fluctuate and my crystal ball is fogged up.

paddy123	Jul 30, 09, 10:39 / #
Hi, SeanBM, thanks for the welcome. The currency is Zloty, I will try to get a quote in another currency. My choices seem quite limited at the moment as banks seem less than willing to lend to foreigners.

SeanBMThreads: 41 Posts: 8,727 Joined: Mar 10, 08	Edited by: SeanBM Jul 30, 09, 10:46 / #
I am Irish and live in Poland. I first tried to get a mortgage here about 8 years ago, it was far from easy then too. It is not just foreigners that find it difficult to get mortgages. Some say, this is one of the contributing factors to Poland's relative stability during these difficult financial times. Shop around, the Zloty is re-gaining some of it's strength now. It fell about 20% against the Euro in the last year but probably because it was over valued. Again, I am not a mortgage broker and my crystal ball needs new batteries. It always depends on who you read. Just out of curiosity, what do you want the mortgage for?.

paddy123	Jul 30, 09, 11:00 / #
I'm looking to invest in an apartment in Warsaw, Krakow, or Poznan, haven't decided which city yet. I know Poland fairly well as I have a lot of family there and have stayed in the country for long periods of time in the past. I may end up living in the apartment in the future. I'm from the UK and my Grandfather was Polish so I might have Polish citizenship which I would need to confirm, which might help me with getting the mortgage.

SeanBMThreads: 41 Posts: 8,727 Joined: Mar 10, 08	Jul 30, 09, 11:20 / #
paddy123: I might have Polish citizenship I think that might help. Of course it is more about earnings or assets but there seem to be more options available to Polish people when getting a mortgage. paddy123: Warsaw, Krakow, or Poznan, haven't decided which city yet. It'll be fun checking them all out :) paddy123: I may end up living in the apartment in the future. I recommend it as a long term investment and if you are considering to live in it, all the better. Best of luck mortgage hunting, let us know if you have any further questions and I will try to recharge the batteris for my crystal ball.

magdalenaGThreads: 7 Posts: 89 Joined: Apr 10, 09	Edited by: magdalenaG Jul 30, 09, 11:56 / #
paddy123: I've just had a quote for a Polish mortgage with an interest rate of 7%. I've seen that the Polish Central Bank has set rates at 3.5%. 7% therefore seems pretty high to me. From what what I've seen, mortgages for foreigners are hard to come by at the moment, but does any one have any idea what an average mortgage interest rate in Poland is at the moment? The WIBOR 3 month ( which most banks use ) is 4.16% today , which therefore means that the bank is taking a 2.84% margin ( this is not excessive for an investment mortgage ) . Liquidity & cost of funds is the main problem in the market at the minute & my advice to you would be that if you have an offer of 7% on the table , then you should take it ( before the margins increase again , which they are very likely to do in the short term) . As for mortgages in CHF/Euro/GBP/USD... as far as I know they are not available from any lenders at the moment , the only game in town is PLN for now. My crystal ball is working well by the way... things are only going to get worse!

paddy123	Jul 30, 09, 12:15 / #
Thanks for the advice magdalenaG , I have been told I could take out the loan in Euros or Pounds but the interest rate would be higher which probably isn't worth it. I'm going to stick with PLN as I think it's the safer bet because my rental income will be in PLN. I'm going to have to get myself a crystal ball, it would be useful in the property market at the moment!

SeanBMThreads: 41 Posts: 8,727 Joined: Mar 10, 08	Jul 30, 09, 12:16 / #
magdalenaG: As for mortgages in CHF/Euro/GBP/USD... as far as I know they are not available from any lenders at the moment , the only game in town is PLN for now. I agree, I just wanted to show him where the discrepancy was. magdalenaG: take it ( before the margins increase again , which they are very likely to do in the short term) . Why do you think they will increase again and how short is short term?. magdalenaG: My crystal ball is working well by the way... things are only going to get worse! How much worse? and is there any chance of a recovery, if so when?.

magdalenaGThreads: 7 Posts: 89 Joined: Apr 10, 09	Jul 30, 09, 14:20 / #
Margins will likely increase to c. 5% with all lenders ( due to current liquidity/funding issues ) Banks are also currently paying 6%-7% for deposit money versus a 2% margin on average that they are taking on borrowings. This cannot be sustained . ( personal loans @ 10% are profitable, mortgages @ 6% aren't ) Therefore , margins need to increase & you are also likely to see arrangement fees in the region of 4% soon. This will all lead to reduced repayment capacity for local borrowers so less people will qualify for mortgages , until a) there is significant wage growth b) banks start lending again in FX ( 3mth base rate in Euro is 0.87% , CHF 0.36% compared to 4.17% in PLN ) or c) Banks lending criteria ease & they increase the LTV available back to realistic levels , ie 90% for owner occupier. My crystal balls says give it 12 months ..at least.

daniel.podpora	Jul 30, 09, 18:11 / #
halo I would like to clarify a few things regarding mortgage in poland. paddy123 Today, 11:00 you do not need to have citizenship. the bank take in to consideration where you earn. EU plus UK - 80% LTV US, Australia, Asia 50%80% LTV if you work full time employment you can get 3,15%-3,7% in CHF with out any problem within 2-3 weeks, decision in principal is within 3 days; only bank account statement is required, no pay slips, no job contract, no p60, and so on, just bank account statement and employer certificate on the bank form and you will get a loan without a problem for 80% LTV with fit out. also USD, EURO is available. I do not recommend PLN at all. even if it 7%, it is still expensive compared to Euro or CHF I would take also an advantage that euro/PLN rate is very high and I suggest Euro or CHF. and this is second for for currency loans obtaining a loan for full time people is very easy but it is still problem to get a loan for a people working as self employed. loans are available but the rate are very high: 9,9% up to 11%. if someone need advice please contact me on daniel.podpora@gmail.com regards Daniel